RVHA Approves N5.9bn Loan Transfer

The Rivers State House of Assembly has given the state government approval to refinance a loan of N5.9 billion from Guarantee Trust Bank (GTB) to Fidelity Bank.
The House made the approval after the Speaker, Rt. Hon. Otelemaba Dan-Amachree had read a letter from the State Governor, Rt. Hon. Chibuike Amaechi, seeking the approval of the House to transfer the sum of N5.9 billion to the Fidelity Bank Plc from the Guarantee Trust Bank.
The House had in 2013 approved the sum of N40 billion loan from Guarantee Trust Bank. The loan was being successfully repaid by the Rivers State Government with a current balance of N5.9 billion as at 9th November, 2014.
According to the letter from the executive to the Speaker, “The state is desirous of transferring the loan of the same amount to Fidelity Bank Plc at a more favourable rate and more longer tenure to ease the financial burden on the state and progressively improve our fiscal status.”
The Speaker reminded the lawmakers that the state government had paid N34.1 billion, with a balance of N5.9 billion and wanted to transfer the balance of the loan to Fidelity Bank and seeks the House’s approval and to be of notice of the state government’s intention.
Speaking on the floor of the House, the House leader, Hon.Chidi Lloyd, informed that the house was not approving a new loan, rather it was transferring the balance of N5.9 billion of the loan to Fidelity Bank with better interest rate and a longer tenor.
According to him, “The house had in 2013 approved a loan for N40 billion for the state government.”
Hon. Lloyd said the state government had been up and doing in repayment of any approved loan, stressing that between 2013 and 9th November, the government of Rivers State had been able to pay over 90 per cent of the loan of N40 billion which was approved.
The lawmaker explained that Fidelity Bank was merely buying over the remainder of the N5.9 billion, adding that the catchment words there were more favourable rate and longer term.
“The rate Fidelity Bank will give the state government is more favourable than GTB gave to the state and the tenure is longer to enable the state government service her obligations of payment of salaries and wages,” he said.
Addressing journalists after the House sitting on Monday, the chairman, House Committee on Finance, Hon. Josiah John Olu, said when the house gave the approval to access the loan, it was specifically spelt out that it has to be from GTB, adding that as at 9th of this month, the state had been able to pay N34.1 billion. “What it translates is that we have a balance of N5.9 billion.”
Hon. Olu said what the state gets from the center was dwindling and that the state needed to be prudent in her financial spending, noting that the interest rate is good and it has longer tenure for repayment, which will not put too much burden to the state.

Speaker, Rivers State House of Assembly, Rt. Hon. Otelemaba Amachree (left) listening to the Leader of the House, Hon. Chidi Lloyd during the sitting of the House on Monday.